The Benefits of Transparency Across the Intellectual Property System

Deputy Under Secretary of Commerce for IP and USPTO Deputy Director Michelle K. Lee

Fordham University School of Law 22nd Annual Intellectual Property Law & Policy Conference

New York, NY, April 24, 2014

Remarks as Prepared for Delivery

Thank you, Professor Hansen, and good afternoon, everyone. It's a pleasure and an honor to speak to you this afternoon, and to continue the great tradition of presentations by senior United States Patent and Trademark Office leaders at this conference, some of whom are here with us today. Two years ago David Kappos spoke about the IP landscape in China. A year ago Shira Perlmutter described some of our agency's broader initiatives, including some copyright and international efforts. Today I want to do something a little different and talk about the USPTO's intense and increasingly important focus on transparency-mainly with regards to our patent operations and patent litigation reform efforts, but I'll also touch briefly on some Trademarks and Copyright initiatives as well.

I think we all agree that transparency in an open, democratic, and innovation-oriented society is a good thing. To make progress-to move forward, if you will-we must be able to see what's ahead. We need light, not darkness. And providing light is what transparency is all about. It's a critical component of the very concept of intellectual property. A patent, trademark, or copyright is part of a grand bargain. An inventor or artist is given a period of exclusive rights, encouraging her to bring innovations to market that will better society in some way. In return, details about the invention or product-like how it is made and used, in the case of patents-are published, empowering others to improve upon the innovation. That is transparency at its best.

This is not a new idea, nor is it uniquely American. Discussion of a legal system that would promote exclusive rights and transparency dates back to the ancient Greeks, but it came to full fruition across Europe during the Renaissance. In the late 1500's, Galileo-considered by many to be the Father of Modern Science-was distracted from his patented work on a water-lifting machine by a new device that would eventually be called a telescope, an early version of which had been created by a Dutch inventor named Hans Lippershey. By the time Galileo learned of it, Lippershey had already filed a patent application in Holland.

But it was Galileo who took Lippershey's design and made significant improvements, boosting its magnification threefold and becoming the first human being ever to lay eyes on a moon of Jupiter. Four of them, in fact. Now it's interesting to note that Galileo never sought a patent for his improved telescope. Were his modifications novel enough to have earned him a patent had he applied? Would Lippershey's telescope design have been considered disqualifying prior art? It's fun to speculate. But the fact remains that by the time our Founding Fathers were drafting the U.S. Constitution in 1787, centuries of patent history had already demonstrated the elegance of that grand bargain of intellectual property; namely, protection and further innovation built upon transparency.

The Constitution's Progress Clause, as every U.S. lawyer in this room knows, gives Congress the power "to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." James Madison went even further in the Federalist Papers, when he wrote that "the right to useful invention" should "belong to the inventors", that "the public good fully coincides" with this right, and that "the utility of this power will scarcely be questioned."

So where do we find ourselves now, two-hundred-and-twenty-five years after the Constitution and its Progress Clause became the law of the land? In short, we continue to promote innovation and transparency-that all-important light-for the "public good." This is true whether we're talking about the current operations of the U.S. Patent and Trademark Office; the U.S. innovation landscape writ large; or those patent, trademark, and copyright owners granted exclusive rights. It's also true of the global economy, in which patented inventions serve as the basis for cross-border expansion of business and trade and the new technological information contained in those patents is rapidly disseminated world-wide.


Let me first touch briefly on a few ways in which the USPTO has made its operations more transparent to the public. Some of you may already be familiar with the Data Visualization Center at, where we have what we call "dashboards" for Patents, Trademarks, Policy and International Affairs, and both our Patent and Trademark Trial and Appeal Boards. These dashboards shine a light on the agency's operations, tracking our commitments under our strategic plan. But we're also taking great pains to make available the full wealth of data we have to offer. For example, we're collaborating with the Census Bureau to create new data products describing the business dynamics of innovative firms.

By linking our robust administrative patent data with a newly developed Longitudinal Business Database from Census-which includes such data as payroll, employment, location, industrial activity, and firm affiliation-we'll be able to investigate in new ways the contribution of innovative firms to job creation and economic growth across both industry and geographic dimensions. Now a lot of this data is confidential, for legal reasons. But in the spirit of transparency and furthering innovation, we'll be making aggregated datasets available to researchers. This data will help the public understand the role of innovation in business performance, which should lead to productivity growth and job creation.

In a similar vein, the Trademark Case Files Dataset we maintain online contains detailed information on 7.4 million trademark applications filed with, or registrations issued by, our office between January 1870 and January 2014. It's derived from the USPTO main database for administering trademarks and includes data on mark characteristics, prosecution events, ownership, classification, third-party oppositions, and renewal history. In releasing this information, our goal is to encourage new streams of research on trademarks and what they indicate about their users, the strategies for employing them, and the wider economic impacts that the data will help uncover.

We're also shining a bright light on steps others can take to improve transparency in the IP system. Take, for example, our new online toolkit that we published in February at The toolkit answers questions like, what is a demand letter? Am I legally obligated to respond? What are my options? Has anyone else received letters or been sued over the patent? That kind of information can be extremely valuable to those who are not steeped in patent law, like smaller "Main Street" retailers and consumers. It helps level the playing field against larger entities engaging in abusive patent litigation.

And let's not forget the wide range of public outreach events that have proven extremely valuable as we work with our stakeholders and user communities to build a better IP system. That includes a series of public roundtables on issues like the Trademark Act, software patents, attributable ownership, and the post-America Invents Act trial proceedings of our Patent Trial and Appeal Board, to name just a few.

We're also holding numerous public events on copyright issues, as an outgrowth of our Green Paper on Copyright Policy, Creativity and Innovation in the Digital Economy. These include the first meeting of a multistakeholder forum on improving the operation of the Digital Millennium Copyright Act Notice and Takedown system, which we co-hosted with the National Telecommunications and Information Administration on March 20.

There will be further meetings of this forum throughout the year, as well as a series of roundtables on the copyright policy issues identified in the Green Paper. Working with our Commerce Department colleagues and the public, we remain fully committed to finding the sweet spot on Internet policy-one that ensures the Internet remains an engine of creativity and innovation; and a place where we do a better job protecting against piracy of copyrighted works.

And of course, our public outreach includes more than just roundtables, but frequent requests for public comment through the Federal Register, and tools like the e-platform for policy collaboration that Trademarks uses to collect stakeholder input on existing policies and proposed policy changes, around the clock, 24/7.


Now let's look at another example of how transparency can be a tool to help build a better IP system-in this case, easy access by patent examiners to prior art, like that Dutch telescope that predated Galileo's. The simple fact is that a lot of material that could help examiners is not readily available, because the organizations retaining that material haven't realized that making it public would be beneficial. It's perfectly reasonable.

If there wasn't a direct connection between publication of older material, such as product sketches and technical manuals, and corporate profitability, why would a company publish the material? We know that our patent examiners already have a wealth of prior art at their disposal when evaluating a given patent application. They're experts at knowing where to look. Increasing access to prior art-bringing more of it into the light-was a topic of discussion during the Software Partnership roundtables we hosted in 2013 at our Alexandria headquarters, in Silicon Valley, and in New York City.

The public proposed "crowdsourcing"-the practice of harnessing the expertise of large numbers of people through the power of the Internet-as a technique to expand the prior art available to examiners-to make it more transparent, if you will-particularly in technology areas like software, where information that resides within the technical community is often not readily available to examiners.

One of three new executive actions we announced at a White House event on February 20th-to build upon the successful reforms of the America Invents Act-is a determination to further refine and improve our existing crowdsourcing program so our examiners can make more informed judgments about patentability. Through our active engagement with the innovation community-including a crowdsourcing public roundtable we held at the USPTO on April 10th -we're gathering insights on how our agency can better leverage the power of the crowd in a fast-changing technology landscape.


So we've discussed the importance of transparency across the innovation community. Let's take a moment to consider a subset of that community: patent owners. Through my experiences as an in-house corporate counsel and, before that, a partner in a Silicon Valley law firm representing a wide range of innovators-from an individual inventor to a Fortune 500 technology company-I came to understand and practice many areas of IP law and almost every aspect of patent law. That included prosecuting patents, asserting patents, defending against patent infringement, and licensing, buying, and selling patents. And I understand-as we all do-the grand bargain that comes with a patent; the transparent publication of key details about the patented invention.

An ongoing debate in regard to greater transparency has been about how much an inventor is obligated to divulge, and when; this includes information regarding ownership. Ultimately, the marketplace works most effectively in an environment of transparency, allowing innovators to make smarter investments, create jobs, and drive economic growth. As I'm sure the economists in the audience today will agree, the more information we all have, the better. And I would add that the economic benefits of greater ownership transparency are truly international in scope; the more awareness there is of the technologies out there, the more cross-licensing opportunities there are across borders.

Because the USPTO has in place systems that record patent ownership in various capacities, the agency has long been focused on the topic of transparent ownership, holding several roundtables and comment request periods. In fact, today is the final day to formally submit comments on possible rules we put forward in January. We're looking forward to carefully considering all the feedback we've received from our stakeholders before making any final decisions. And I would be remiss if I didn't acknowledge that Congress is also examining this subject.

As many of you know, the U.S. House of Representatives passed patent reform legislation last December, and we encourage the Senate to do the same. Both bills, as currently drafted, include provisions that would increase requirements to update ownership information. We at the USPTO have been very engaged with Congress throughout this process of legislative action, and we'll continue to work closely with legislators as they address this issue. But while these discussions continue-on granular issues related to possible new rules or legislation-we all need to remember the broader importance of transparency in ownership, of operating in the light.

I don't mean to dismiss the importance of details, or of costs. But as we discuss these issues, we can keep in mind that just as intellectual property is a balance between rights and transparency, so too must there be a balance in obligations placed on IP owners relative to the benefits of providing the public more information.


Transparency in our IP system, as it happens, was a preoccupation of this country's first Commissioner of Patents, Secretary of State Thomas Jefferson. While Jefferson was serving as an ambassador to France, he endorsed the Progress Clause in an exchange of letters with his protégé, James Madison. And he later took his role as our first patent examiner seriously, often bringing applications home with him to peruse in bed-not a practice we encourage in our examiners, by the way. A few years after he had retired from public service, Jefferson contemplated the balance inherent in the Progress Clause.

In an 1813 letter to a friend he invoked a metaphor of "light" in considering an important distinction in patent law, the separation of an idea from a patentable invention. An idea, he said, belongs to all of us. "He who receives an idea from me," he wrote, "receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me." It's a powerful metaphor. Jefferson equated an idea to a flame. But we know that the patents he approved as our first Commissioner also produced flames capable of sparking further invention, without darkening the rights of those to whom he issued those patents.

Jefferson also experienced firsthand the difficulties of finding balance in the IP system, in ensuring that the grand bargain produced the greatest efficiencies and the most significant economic benefits. He knew it wasn't easy, and he often wrestled with those challenges in his writings and correspondence. And more than two hundred years later, we're still wrestling with those challenges. Still trying to find that perfect balance that affords strong IP protections without stifling innovation. It's not easy, and it probably never will be. But it's worth holding as an image in our minds that light of Jefferson's candle taper.

As we all work together to build a better IP system, the light of transparency can guide us. It empowers progress by letting us see ahead, as we progress together toward a better system-for patents, trademarks, and copyrights alike.

And on that note, thank you for your time and attention today. It's been an honor to participate in such a well-established program featuring so many inspiring speakers, and I look forward to engaging with you all in the years ahead, and to keep that light shining strong.